Greece still planning bond market return in 2011

Debt-strapped Greece still plans to return to bond
markets this year but could tap a newly-expanded European assistance programme in 2012 if market pressures don't ease up, Finance Minister Yiorgos Papakonstantinou said Wednesday. 

European Union leaders at the weekend agreed to improve the terms of Greece's bailout loans, totaling €110 billion through 2013, and allow a new financial rescue fund to buy bonds directly from struggling eurozone countries in exceptional circumstances. 

Papakonstantinou told parliament that Greece needs to borrow €66 billion in 2012. Most would come from the bailout loans, while €27 billion would be raised through bond sales, on the market or with EU help. 

"We believe that we can go out into the (bond) markets, and we believe we can do so before the end of the year," Papakonstantinou said. 

"But what if the markets don't open?" he said. "The European fund ... can absorb that money and safeguard Greece in 2012 - a very important decision with immediate consequences for Greece." 

Greece launched drastic cost-cutting measures in late 2009 and narrowly missed its ambitious deficit-reduction targets last year. But interest on bonds remains prohibitively high and ratings agencies have relegated the country's debt to junk status. 

Papakonstantinou acknowledged the government is facing difficulties in meeting revenue targets as the country suffers a third year of recession. 

On Tuesday, he appointed the head of the ministry's fraud office as the government's top tax official. 

source: AP